GRUPO GIGANTE AND FLEMING COMPANIES FORM JOINT VENTURE IN MEXICO
MEXICO CITY, Feb. 26 /PRNewswire/ -- Grupo Gigante S.A. de C.V. and Fleming Companies, Inc. (NYSE: FLM) today announced a joint-venture agreement to launch in Mexico a new retailing concept -- upscale price impact supermarkets. The new venture plans to develop a nationwide store network bringing a wide range of low cost products to the Mexican consumer. The venture will be capitalized with an initial investment of U.S. $20 million. The stores will combine Grupo Gigante's expertise as one of Mexico's strongest nationwide retailers with Fleming's skills as a pioneer of price impact stores in the United States.
Angel Losada Moreno, executive vice president of Grupo Gigante, will be chairman of the new company. Dean Werries, chairman and CEO of Fleming Companies, will be the new company's vice chairman. Wayne Epperson, currently a vice president and corporate officer of Fleming Companies, will assume the position of chief executive officer of the new venture.
During the initial year, the joint-venture will open four to six stores. These large, brightly lit supermarkets will offer between 10,000 and 14,000 items most of which will be nationally branded items as well as high quality perishable products. Consumers will be able to buy quantities of their choice in convenient package sizes at everyday low prices. State-of-the-art information technology and high volume sourcing will keep operating costs low, savings will be passed directly to the consumer.
Angel Losada Gomez, chairman of Grupo Gigante said, "We are pleased to join with Fleming Companies to launch this new venture. Fleming has a proven track record in helping retailers compete more effectively and the new venture will complement our nationwide penetration strategy. We will launch the price impact stores in mid-sized cities and densely populated areas of large cities. We believe the new venture will be well accepted by consumers because we intend to offer the best prices on the products they purchase most frequently."
According to Dean Werries, chairman of Fleming Companies, "The economic change of direction initiated by President Carlos Salinas will ensure substantial economic growth in the future. We want to be a major participant in the market. Our experience in the U.S. tells us that the price impact formula responds to the consumer's demand for consistency in supply, price and quality. Our competitive edge in distribution and technology combined with Grupo Gigante's knowledge and penetration of the Mexican market, will bring tangible benefits to the Mexican consumer.
"We see enormous potential for this venture extending beyond this initial phase. For example, we plan to explore avenues for product sourcing."
The joint-venture is the first major retail venture for Fleming outside of the U.S.A. and the first for Grupo Gigante with a non-Mexican partner in the retail food business.
One of Mexico's strongest nationwide retailers, Grupo Gigante operates 101 self-service stores under the "Gigante" name throughout Mexico. Grupo Gigante also owns 25 family-style restaurants in five cities under the "Toks" name, and five specialty restaurants in Mexico City.
The United States' largest wholesale food distributor, Fleming serves more than 3,000 supermarkets in 36 states. Fleming serves one out of every ten supermarkets in the U.S. The company's 36 computer- supported divisions supply customers with nearly every national brand grocery product as well as high volume private label products. Fleming also offers a complete range of support services to enable retailers to compete effectively in their markets.
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/CONTACT: Arturo Trevino, 011-525-531-3260, or Juan Carlos Mateos, 011-525-250-0789, both of Grupo Gigante, or Jim Clark of Fleming Companies, 405-841-8120, or Fern Lazar of Dewe Rogerson, 212-688-6840, for Grupo Gigante/
(FLM) CO: Grupo Gigante S.A. de C.V.; Fleming Companies, Inc. ST: Oklahoma IN: FOD REA SU: JVN

PS -- NY005 -- 2665 02/26/92 09:14 EST

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